Douglas Borthwick, INX’s chief business officer, says the security token offering (STO) industry is yet to take. He believes the STO industry is still nascent compared to the overall digital asset industry as companies and individuals get into the field. Borthwick sees a huge educational gap between those who are aware of STOs and those who have never heard of it.
STO, also known as a tokenized initial public offering, is a type of public offering. It involves the sales of tokenized digital securities or security tokens on security token exchanges. This digital asset can be used to trade real financial assets like equities, fixed income, or real estate. It also uses blockchain technology to store and validate token transactions.
In 2021, INX emerged as the first company to hold a tokenized IPO approved by the US Securities and Exchange Commission, raising $85 million. INX has since then listed five private security tokens like the Blockchain Capital Token (BCA) and a public token – the INX token. Borthwick believes the game has yet to begin as players are now only going onto the field. He said more offerings are required to increase the functionality of STOs. Borthwick says that as more companies become STOs through a public offering, tens of thousands of investors will be attracted. This will bring about much more progress in the industry.
INX wants to solve up-to-date issues around the STO industry, such as lack of awareness and education. It’s working with financial professionals and educating them on the STO process and the efficiencies for more issuers. Borthwick says the industry is poised to take off. With the efficiencies of the blockchain technology, all assets will migrate to it and current digital projects – given the recent warnings from SEC – classified as utility tokens will be reclassified accordingly. Borthwick said they have built the playing field and are now teaching the rules, and identifying the process.
INX is working towards drawing a line between the STO industry and the overall cryptocurrency market. It’s trying to distinguish STOs from crypto as they should not be in the same bucket. Borthwick also pointed out that the current bear market had no direct impact on INX as STOs are very different from others in the space.